Commercial Real Estate Finance

Archive for February 18th, 2013

Thankfully, I don’t fly nearly as often as I used to. I’m okay with flying–it’s the airports I have a problem with. No matter how uncomfortable a four-hour flight on Southwest may be, it’s still preferable to the endless, serpentine Security line.

Though waiting and finally getting through the metal detectors is rarely an airport highlight, I can think of one group of people who are extremely grateful for the work the TSA does (no matter how many water bottles and toenail clippers the TSA confiscates). That group is the retail sector.

After all, the TSA keeps airline passengers captive until (hours later) their plane finally begins boarding. For retailers, few things are more desirable than a captive audience. Where but airports (okay, and movie theaters, and theme parks) can you find sodas selling for $5 apiece?

While the freedom to charge exorbitant prices for simple comestibles provides a great advantage for companies that operate airport terminal retail, it hasn’t caused these operators to become complacent. In fact, some are now working to emulate the strategies of North America’s most successful, high-end shopping malls, bringing in the sort of luxury retail associated with Fifth Avenue.  Read the rest of this entry »